Video highlights threat to export markets

• While U.S. farmers produce wheat of the highest quality, only about 50 percent of each year’s crop is consumed here at home.
• As a result, developing and growing U.S. wheat exports has a direct impact on farm gate prices.
• Through MAP and FMD, the federal government shares costs with U.S. farmers to help them compete in a growing global market.

U.S. Wheat Associates | Jun 08, 2011

The long-term impact on global demand for U.S. wheat and farm income would be devastating if Congress fails to fund the Market Access Program (MAP) and the Foreign Market Development (FMD) program administered by USDA’s Foreign Agricultural Service.

That is the conclusion of a new video presentation just released by U.S. Wheat Associates (USW), the wheat industry’s export market development organization.

While U.S. farmers produce wheat of the highest quality, only about 50 percent of each year’s crop is consumed here at home. As a result, developing and growing U.S. wheat exports has a direct impact on farm gate prices.

Through MAP and FMD, the federal government shares costs with U.S. farmers to help them compete in a growing global market. Yet even in the face of increasing export investment by foreign competitors, these programs are at risk in the current federal budget debate.

“Without the Foreign Market Development program and the Market Access Program, USW would not be able to continue our work overseas,” USW President Alan Tracy says in the presentation.

“The result is that our competitors, including Canada, Australia and Russia, would be ready to swoop in and take those markets. And once we lose them, they don’t come back very quickly.”

Fortunately, U.S. wheat farmers can play an active role in the debate about export promotion funding says Dana Peterson, CEO of the National Association of Wheat Growers (NAWG), who also appears in the presentation. “These programs are authorized in the farm bill and appropriated every year,” Peterson says. “Wheat growers can have discussions with their congressional representatives to make sure they know that export promotion is important and makes a difference on their farms.”

Helps build overseas demand

Like hundreds of other non-profit farm organizations, farmer cooperatives and small- to medium-sized businesses, USW uses MAP and FMD funds to help build overseas demand for U.S. agricultural products. Tracy says most of that funding provides training and technical assistance to wheat buyers and wheat food processors.

“We bring them to the United States so they can learn and understand our export system, the different types wheat we produce and its qualities,” he adds. “We help them introduce new products in their own markets — whatever it takes to expand the export opportunities for U.S. wheat.”

In the presentation, Keith Kisling, an Oklahoma wheat grower and past USW Chairman, and Randy Suess, a Washington wheat grower and current USW vice-chairman, discuss the disparity between U.S. export investment and foreign government spending.

“In my travels, I saw a lot of countries that export wheat being very aggressive,” Kisling says. “And we have to be right there and compete with them.”

“When I look at how much other foreign countries spend on their export programs,” Suess says, “it make ours look pretty miniscule.” A study by USDA, for example, showed that in 2002, foreign competitors were spending an estimated $1.2 billion every year on agricultural export market development. In 2010, the European Union alone spent $1.4 billion to promote agricultural products in domestic and export markets.

“In contrast, the MAP and FMD programs currently provide an annual, combined total of $235 million to support U.S. agricultural export promotion. With an annual investment of more than $13 million in cash plus goods and services from 19 state wheat commissions, USW qualifies for about $13 million in MAP and FMD funds. It is an investment partnership that provides an excellent return to wheat growers and the U.S. economy.

“For every one dollar wheat farmers use in conjunction with these USDA dollars, we receive $115 gross revenue back,” Suess says. “And that isn’t just sent to the farmers, but it’s also for industry people and for people in the entire United States. So we’ve got a great success story.”

USW is the industry’s market development organization working in more than 100 countries on behalf of America's wheat producers. The activities of USW are made possible by producer checkoff dollars managed by 19 state wheat commissions and through cost-share funding provided by USDA’s Foreign Agricultural Service.

For more information, visit www.uswheat.org or contact your state wheat commission.